Zomato in discussions with NBFCs to provide loans to restaurants
Zomato, a leading food delivery platform, is reportedly reviving its lending ambitions after a brief hiatus. The company is currently in discussions with several non-banking financial companies (NBFCs) to provide working capital loans to its associated restaurants. According to Moneycontrol, Zomato will also act as a Loan Service Provider (LSP), sourcing loans from its partners and distributing them to potential borrowers.
Zomato's role and responsibilities as a loan service provider
As an LSP, Zomato will also be responsible for securing loans from its affiliates, disbursing them to partner restaurants, and collecting repayments. The company will earn a fee for this service, the amount of which will depend on its agreement with the lender. The team has been working on this initiative for some time now and is expected to make an announcement next quarter.
Zomato's previous partnerships in the lending space
Zomato had previously collaborated with NBFCs like Neogrowth, InCred, and Indifi to support its lending operations. The company had set up Zomato Payment Private Limited (ZPPL) in August 2021 to apply for a payment aggregator (PA) authorization and later established a wholly-owned NBFC, Zomato Financial Services, in February 2022. During the March FY24 quarter, the company surrendered its PA license and wrote down ₹39 crore worth of investments in ZPPL.
Zomato is still awaiting approval for its NBFC license
Zomato's lending journey began in 2021 during the pandemic, initially aiming to operate via their own NBFC license. However, due to delays in obtaining the license, the company has now decided to restart the lending operations under a partnership model. To spearhead this initiative, Zomato has recently appointed Akshay Gautam from Indifi Technologies as Assistant Vice President (AVP). Notably, Zomato is still awaiting approval for its NBFC license.
